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Posts tagged ‘revenue’

So I’ve been thinking (which is always a dangerous thing). I am not entirely convinced that Carnival should be considered an economic value to T&T. Some of the figures I am seeing suggest it generates $100 million US in revenue, but government is spending over $50 million US on Carnival which is a 100% ROI on the face of it, but that doesn’t tell the whole story.

I suspect the amount of taxpayers money spent is a lot more when other things like police overtime and other subventions are included. Nowadays, much of the costume work is contracted out to China, and I am pretty sure much of the markup ( after band expenses) ends up in offshore accounts. Similarly, I am assuming some of the ticket revenue from Carnival events, such as the big fetes and ‘competitions’ is undeclared and also ends up in offshore accounts. Most of the big hotels are US managed, and obviously the lion’s share of the revenue ends up being sent abroad.

Then consider the disruption to normal commerce that occurs as a result of a lack of productivity and the country being shut down for several days. I haven’t seen that being quantified.

Finally, there is the opportunity cost . If the T&T government invested that money in some other venture it could easily make more money than a mere ROI of 100% ( which I think is an exaggeration) .

My conclusion is that Carnival is an investment in keeping the population distracted, and claiming it is an economic boost to the economy is really not true.

(As a contrast, Toronto’s Carnival is estimated to attract over 1.3 million visitors and generate over $400 million in revenue from a combined Toronto and Province investment of $1 million. That’s a respectable ROI in terms of taxpayers money.)